TY  - BOOK
AU  - Ize,Alain
AU  - Parrado,Eric
TI  - Dollarization, Monetary Policy, and the Pass-Through
T2  - IMF Working Papers; Working Paper
SN  - 1451859570 :
SN  - 1018-5941
PY  - 2002///
CY  - Washington, D.C.
PB  - International Monetary Fund
KW  - Inflation
KW  - imf
KW  - Monetary Authorities
KW  - Open Economy Macroeconomics
KW  - Optimal Monetary Policy
KW  - Small Open Economy
KW  - Peru
N2  - This paper explores how real dollarization (dollar indexing of wages), financial dollarization (dollar denomination of financial contracts), and monetary policy interact in a general equilibrium, new open-economy macroeconomics model with real shocks. Real dollarization is avoided as long as the home monetary authorities conduct monetary policy optimally (maximize local welfare). Suboptimal monetary policies are more likely to induce real dollarization when the correlation between domestic and external shocks is high, since in this case the (presumably optimal) foreign monetary policy guarantees a better level of protection against macroeconomic uncertainty. While real dollarization contributes to financial dollarization, important asymmetries between the two were found
UR  - http://elibrary.imf.org/view/IMF001/01857-9781451859577/01857-9781451859577/01857-9781451859577.xml
UR  - http://www.imfbookstore.org/IMFORG/9781451859577
ER  -